Realtors Kill Ellis Act Eviction Reform in Legislature—Again

For the second year in a row, state legislation targeted at reining in Ellis Act evictions in San Francisco, which have helped drive its gentrification, failed.

Last year, Senator Mark Leno’s Senate Bill 1439 died in Assembly committee last year after Senate passage. This year, despite some retooling to satisfy some realtor complaints, Senate Bill 364 didn’t pass its first committee hurdle in the Senate.

The bill would have preserved affordable housing and limited evictions by forcing new property owners to wait five years before invoking the 1986 Ellis Act, which lets landlords evict tenants and sell the apartment buildings. The Act was originally intended as a way to allow landlords to exit the rental business without undue hardship.

But speculators have used it to flip buildings in San Francisco’s overheated real estate market and driven eviction rates higher. The Ellis Act was used in 216 evictions in 2013 and 113 last year, but is surging again this year with 69 in the first three months. It has been used more than 3,700 times since 1997.

A study (pdf) by Tenants Together found that 60% of Ellis evictions in 2013 were by landlords who had held their property for less than one year and 79% were by owners who had made their purchase within the last five years. Cumulative data gathered from 2009-13 was similar.

Although Ellis evictions slowed in 2014, evictions of all kinds were up. The San Francisco Rent Board reported a total of 2,120 eviction notices filed for the 12-month period ending February 28, an increase of 7% over the previous year and 54.7% over the past five years.

Beyond the individual human tragedy of people losing their homes, the net effect is shrinkage of an already-too-small affordable housing market and upward pressure on rents.

Growing state lawmaker disinterest in Leno’s bills could have been related to the diminishing number of Ellis Act evictions in San Francisco or the way it specifically targeted that city for relief. Randy Shaw at Beyond Chron suggested it was time to move on and press for a statewide bill, especially considering the surge in Ellis Act evictions in Los Angeles County.

There has been a surge, but the Southland has not been a stranger to Ellis Act evictions. The city of Los Angeles has lost more than 13,000 rent-controlled apartments to them since 2001. Owners filed 378 Ellis requests in 2013, 40% more than the year before.

But a statewide bill does nothing to overcome the largest impediment to rolling back the Ellis Act. The California Association of Realtors vehemently opposes it and Leno blamed it and its San Francisco affiliate for his bill’s defeat.

“They have put extraordinary energy against lobbying against this statewide,” he told the San Francisco Business Times. “All we're trying to do is differentiate between real landlords and speculators. This would not impact their business one bit.”

Au contraire, Jay Cheng at the S.F. Association of Realtors protested, “We don't represent speculators. We represent people who are good landlords. The bill would hurt us more than they hurt speculators.”